The Price of Tomorrow: Why Deflation is the Key to an Abundant Future - Jeff Booth

Written by Jeff Booth
Format: M4A
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Unabridged

What we currently observe in many countries is that while inflation rates are low, central banks have been taking unconventional stances to implement monetary stimuli. Jeff Booth builds on his personal experiences as a technology entrepreneur and argues that this approach will be maxed out at some point. Productivity gains from technological advancements, especially in artificial intelligence (AI), will become so large and drive inflation rates down to such an enormous extent, that at some point, it will become impossible for central banks to counteract this development with the help of extraordinary monetary policies. Therefore, we should allow deflation to expand to its full extent. Even though this can be hard in the short term, it would be better than facing even worse consequences in the future.

Booth proposes an international agreement on a system comparable to Bretton Woods, which was at work after the Second World War and until its collapse in 1973. From his perspective, such a system with fixed or less flexible exchange rates could create disincentives for central banks to implement ever-more expansionary monetary policy measures.

Using basic insights from game theory, Jeff argues in his book that such a solution needs to be internationally agreed upon and that unilateral actions will not lead to the best overall outcome. When nothing is done, people will search at some point for alternatives to official currencies such as the cryptocurrency Bitcoin.